Background:
What is the swedish Law on Religious
Communities and how it was applied on Scientology

Following the granting of full tax exemption by Swedish
tax authorities last November, Churches of Scientology in Sweden are now
registered as "religious communities" by the National Judicial Board for
Public Lands & Funds. This is a new body, and the registrations
were made under a new law on religious communities that took force on January
1, 2000.

We were informed of this, through Swedish counsel, by
the National Judicial Board on Friday. The official registrations
were obtained Monday, March 13. The Church of Scientology of Sweden
and local churches of Scientology in Gothenburg, Malmo and Stockholm are
all separately registered.

The registrations are made under a new law called the
Act on Religious Communities, one of a series of laws that are implementing
the separation of Church and State in Sweden. Ever since the 16th
century, the Lutheran Church has held the privileged status of being the
state Church. As of January 1, 2000, that status officially came
to an end. The Lutheran Church is now known officially at the Church
of Sweden, and it and the Church of Scientology are the first two religious
communities to receive registration under the new Act.

To give you a better understanding of this new law, section
1, 2 and 5 of the Act on Religious Communities states:

"(1) There are provisions about freedom of religion in
the Constitution and in the European Convention on Protection of the Human
Rights and the Basic Freedoms."

"(2) A religious community in the sense of this law is
a community for religious activity which includes organizing religious
services."

The significance of the registration is that the Church
of Scientology now stands on an equal footing with the Lutheran Church,
as do all other churches that receive registration. The registration
is entered in a corporate register of religious communities that was established
as of 1st January.

Until now, the Swedish Churches were corporately registered
and operating as idealistic associations.

An important point to remember too is that last November,
the tax authorities in Stockholm granted the Church exemption from all
taxes on the basis that the Church is a nonprofit organization with a religious
purpose. The tax office in Stockholm adjudicated that the Church
is an idealistic association providing a public benefit and therefore exempt
from corporate income tax and value added tax.

In the written background to the decision, which arose
out of a past tax matter relating to the Swedish Church, the ruling from
the tax authorities refers to the Church's activities as "consist[ing]
of, among other things, worship, services such as baptism, marriages and
funerals, spiritual counselling and study of the Church's scripture." The
Church's economic activity, the tax authorities found, forms a natural
part of its publicly beneficial purpose, and the Church falls within the
tax code which exempts associations whose purpose is to forward religious
objectives.

All Churches of Scientology in Sweden were registered
on March 13 as "religious communities" by the National Judicial Board for
Public Lands & Funds. The registrations were made under a new
law on religious communities that took force on January 1, 2000, with the
purpose of further establishing equal rights for all religions in Sweden.

These registrations follow the granting of full tax exemption
to the Church by Swedish tax authorities last November. They amount to
an unequivocal recognition that the Swedish government is honoring its
commitment to ensure religious equity, and they confirm the status of Church
of Scientology as a religion in Sweden.

The law, titled the Act on Religious Communities, mandates
a separation of the Lutheran Church, officially called the Church of Sweden,
and the State. The Lutheran Church and the Church of Scientology
are among the first religious communities to be registered under the new
Act.

The Church of Scientology of Sweden as well as local churches
of Scientology in Goteborg, Malmo and Stockholm all received registrations.
The same day, registrations were also issued for the Jehovah's Witnesses
and the Salvation Army.

"These registrations show that Sweden is again leading
the way in Europe when it comes to promoting equality between religions,"
said Rev. Heber C. Jentzsch, President of the Church of Scientology
International. "All across the world from the United States to Sweden
to Australia, Scientology is now recognized as a worldwide religion."

The new Act confirms that Sweden's treatment of religious
communities aligns with the provisions about freedom of religion in the
Swedish Constitution and the European Convention on Human Rights.
According to the Act, "A religious community in the sense of this law is
a community for religious activity which includes organizing religious
services."

The Church of Scientology in Sweden celebrated its 30th
anniversary last year. In November the same year, Swedish tax authorities
declared the Church a non-profit organization with a religious purpose
that serves a public benefit, and is therefore entitled to exemption from
taxes. That decision by the Stockholm tax office was a milestone
for the Church of Scientology in Sweden, and the new registrations as religious
communities further confirm the religious status and establishment of the
Church in Swedish society.